Posted: April 24th, 2016
1) When a corporation distributes a dividend the
most common form of distribution is a cash dividend.
Dividends account will be increased with a credit.
Retained Earnings account will be directly increased with a debit.
Dividends account will be decreased with a debit.
2. An accounting record that includes a list of accounts and their balances at a given time is called a
chart of accounts.
3. The purpose of the ledger is to
record chronologically the day’s transactions.
keep a record of documentation to support each transaction.
keep in one place all information about changes in specific account balances.
make sure that all assets, liabilities, etc., have normal balances at all times.
4. In recording accounting transactions, evidence that a transaction has taken place is obtained from
the Securities and Exchange Commission.
5. If total liabilities increased by $5,000, then
assets must have decreased by $5,000.
stockholders’ equity must have increased by $5,000.
assets must have increased by $5,000, or stockholders’ equity must have decreased by $5,000.
assets and stockholders’ equity each increased by $2,500.
6. Supplies are recorded as assets when purchased. Therefore, the credit to supplies in the adjusting entry is for the amount of supplies:
either used or remaining.
7. At March 1, I. Repo Inc. reported a balance in Supplies of $200. During March, the company purchased supplies for $950 and consumed supplies of $800. If no adjusting entry is made for supplies:
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